![\"Record](\"https:\/\/static.toiimg.com\/thumb\/msid-131904525,imgsize-803240,width-400,height-225,resizemode-4\/oil-imports.jpg\" "\\"India\u2019s")
<\/div>\n<\/div>\n<\/div>\nUS-Iran war: India, importing around 90% of its crude needs, is stocking up on oil even as hopes of the Strait of Hormuz reopening completely stay. India has diversified its crude oil procurement, and stepped up imports in a big way to have sufficient reserves at a time when global oil trade remains disrupted and oil prices still remain above pre-war levels.While India continues to rely heavily on energy supplies from the Gulf, the crisis has prompted a faster push towards diversification. Higher crude purchases from Russia, Brazil and Venezuela have helped soften the impact on oil imports, while LNG importers secured additional cargoes from countries such as Oman, Nigeria and the US.Gulf exporters are likely to slowly recover their share of the Indian market once conditions in the Strait of Hormuz stabilise. Even so, India’s import network is expected to remain more diversified than it was before the disruption.So, how is India managing its crude oil supplies amid adverse global conditions? Let\u2019s take a look:<\/span><\/p>\n India\u2019s state-owned refiners have already lined up sufficient crude supplies for around the next two months and are not under immediate pressure to restart purchases from the Middle East, even if commercial shipping through the Strait of Hormuz resumes.According to a Bloomberg report, Indian refiners are expected to continue buying Russian crude supplies even after the expiry of US waivers, as the industry has largely adapted and developed alternative mechanisms.Russian barrels continue to be priced competitively, trading at discounts of $1 to $2 per barrel to Dated Brent, the report said. Those discounts could become even larger if supply availability increases further.India’s crude oil purchases from Russia climbed sharply in June, while imports from the United Arab Emirates remained close to historic highs, as refiners moved to secure supplies before crude flows from Gulf producers fully normalise following the reopening of the Strait of Hormuz.According to data from maritime and commodity intelligence firm Kpler, India imported an average of 2.66 million barrels per day (bpd) of Russian crude between June 1 and June 19, up significantly from 1.91 million bpd in May. The increase further strengthened Russia’s position as India’s largest source of crude oil.Imports from the UAE averaged 636,000 bpd during the same period, only slightly below the record level of 644,000 bpd seen in May. Venezuela became India’s fourth-largest crude supplier, shipping 209,000 bpd, trailing Saudi Arabia, which supplied 384,000 bpd.Meanwhile, crude purchases from the United States declined sharply, dropping to 91,000 bpd from 252,000 bpd in May, Kpler data showed.Russian crude remains central to India’s oil procurement strategy.Crude imports from Russia are projected to cross 2.35 million barrels per day in June, a level that could mark a new record. The increase is being driven by attractive discounts and consistent demand from domestic refiners.Even after traffic through the Strait of Hormuz returns to normal, Russian oil is expected to retain its key position in India’s import mix because of its economic advantages and the reliability of supply.Since March, Indian refiners have stepped up crude purchases from the Atlantic Basin and Venezuela to compensate for reduced availability from Gulf producers. Venezuelan imports are projected at 3,00,000-4,00,000 barrels per day in June, offering refiners that process heavier crude grades a valuable alternative source.<\/p>\n India is also looking to ramp up its strategic oil reserves to enhance its energy security. Oil and Natural Gas Corp (ONGC) has been tasked with developing and stocking India’s next strategic petroleum reserve, a government-backed initiative that could involve an investment of roughly $1.6 billion (Rs 15,000 crore).The government\u2019s decision follows the Iran war, which highlighted the country’s limited strategic crude reserves and its exposure to disruptions in global supply. As part of efforts to bolster India’s energy security, ONGC has been asked to take up the project, reported ET.The planned facility will consist of a 1.75 million metric tonne (MMT) underground crude storage cavern at Mangaluru. Once completed, it will increase India’s existing emergency crude storage capacity of 5.33 MMT by nearly one-third.This would mark the first instance of a state-owned oil company being entrusted with the development of a strategic petroleum reserve facility. The three existing SPR sites were financed by the government and are owned and operated by Indian Strategic Petroleum Reserves Ltd (ISPRL), a government-owned special purpose vehicle.India’s current SPR infrastructure comprises facilities at Visakhapatnam in Andhra Pradesh with a capacity of 1.33 MMT, and at Mangaluru and Padur in Karnataka with capacities of 1.5 MMT and 2.5 MMT, respectively.India’s oil consumption stands at around 5 million barrels a day, while its strategic petroleum reserve capacity totals 5.33 million tonnes, equivalent to roughly 39 million barrels. Compared with other major oil-consuming economies, this reserve capacity remains relatively small.Substantial crude reserves act as a safeguard against supply interruptions, sharp increases in oil prices and currency fluctuations arising from geopolitical developments or other events, including the Iran war. India has also signed an MoU with the UAE for development of strategic petroleum reserves.The import pattern reflects India’s continued efforts to diversify its energy procurement strategy. Discounted Russian crude remains attractive for refiners, while higher volumes from the UAE have helped offset concerns surrounding supplies moving through the strategically important Strait of Hormuz.<\/p>\n Crude shipments through the Strait of Hormuz began to recover toward the end of last week after the US and Iran reached a ceasefire agreement. However, concerns over the sustainability of the truce persist.There are already indications that conditions are beginning to stabilize. Following the US-Iran agreement intended to bring an end to the conflict, three Indian-flagged oil tankers transporting over 8,60,000 tonnes of crude oil, along with an Indian LNG carrier, have successfully resumed passage through the strategically important Strait.<\/p>\n Importance of Hormuz for global oil flows<\/p>\n<\/div>\n<\/div>\n According to Sumit Ritolia, Senior Manager – Modelling at Kpler, the resumption of traffic through the Strait of Hormuz is set to deliver the fastest improvement to India’s liquefied petroleum gas (LPG) supplies.In contrast, crude oil and liquefied natural gas (LNG) imports are expected to return to normal at a slower pace, as India has already adjusted to prolonged disruptions by expanding supply sources and relying on alternate routes.Before the conflict began, the Gulf accounted for approximately 50 per cent of India’s crude oil purchases, about two-thirds of its LNG imports, and close to 90 per cent of the country’s LPG supplies sourced from overseas.<\/p>\n Petroleum minister Hardeep Singh Puri on Saturday said petrol and diesel prices in India had seen a limited rise despite sharp fluctuations in global crude oil markets.When asked whether domestic fuel prices could be cut in light of softer global crude oil prices, Puri said that among the 193 member countries of the United Nations, only Japan had seen a smaller increase in petroleum prices than India.He said the cumulative rise in petrol and diesel prices had been restricted to Rs 7.60 and added that, when compared with price levels during the Russia-Ukraine conflict that began in 2022, there had effectively been no increase.Commenting on developments around the Strait of Hormuz, Puri said oil marketing companies were suffering losses of nearly Rs 1,000 crore every day.He said there was scope for fuel prices to decline once refiners started processing crude purchased at lower rates.“At present, companies are carrying stocks bought at elevated prices. Once lower-cost crude reaches refiners, there is a possibility that fuel prices may come down,” he said.<\/div>\nStepping up crude imports & stocking up<\/h2>\n<\/p>\n
Building strategic reserves <\/h2>\n<\/p>\n
Strait of Hormuz in focus<\/h2>\n<\/p>\n
![\"Importance](\"https:\/\/static.toiimg.com\/photo\/msid-131904588\/importance-of-hormuz.jpg\" "\\"Importance")
<\/p>\nPetrol, diesel prices<\/h2>\n<\/p>\n